Summary#
This bill would temporarily reduce the amount of certain Social Security benefits that must be included in taxable income for tax years 2026 and 2027. It applies a separate tax calculation for retirement (old-age) and disability benefits. For retirement benefits and tier 1 railroad retirement benefits, the bill reduces the taxable portion by 10% for tax year 2026 and by 20% for tax year 2027. The bill also requires transfers from the general fund to replace the lost revenue to the Social Security trust funds and the Medicare Hospital Insurance trust fund.
What it means for you#
- If you receive old-age Social Security benefits or tier 1 railroad retirement benefits, a smaller share of those benefits would be counted as taxable income in 2026 and 2027.
- The reduction is 10% for the 2026 tax year and 20% for the 2027 tax year, applied to the portion of benefits that would otherwise be taxable under current rules.
- Disability benefits described under section 223 are calculated separately and are not reduced by the percentage change described above.
- The bill is temporary and applies only to taxable years beginning after December 31, 2025, and before January 1, 2028.
Expenses#
- The bill directs that amounts equal to the reduction in Treasury revenue be appropriated to the Federal Old-Age and Survivors Trust Fund, the Federal Disability Insurance Trust Fund, and the Medicare Hospital Insurance Trust Fund. These amounts would be transferred from the general fund.
- No publicly available information on the total dollar value of those transfers or the budgetary score is provided in the bill text.
Proponents' View#
No publicly available information.
Opponents' View#
No publicly available information.